The focus of cryptocurrency regulation is expected to be a significant priority for the 119th Congress.
There are promises of providing clarity on stablecoin regulations and determining whether the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC) should oversee crypto firms.
The political landscape seems favorable for the industry, but experts anticipate that the legislative process will be slow.
Marta Belcher, president of the Filecoin Foundation, emphasizes that expectations regarding the speed of legislative action need to be recalibrated.
The first 100 legislative days are crucial, with Rep. French Hill, chair of the House Financial Services Committee, pledging to advance bills on stablecoins and market structure.
Stablecoin legislation is expected to take precedence, and there is bipartisan support for these initiatives.
However, market structure legislation is more complex and may face challenges.
The potential for a divided Congress could further complicate the passage of comprehensive crypto regulations.
The establishment of a Bitcoin national reserve has sparked debate among legal experts, but the likelihood of an executive order to convert Bitcoin holdings into Treasury reserves is less than 50%.
The overall sentiment remains cautious, and previous attempts to propose a Bitcoin reserve bill have failed to gain traction.
Political pressures are mounting, particularly with the upcoming midterm elections in 2026.
The crypto industry's influence on electoral outcomes has made it important for candidates in competitive races to adopt pro-crypto stances.
The new Republican majority in both the House and Senate is eager to collaborate with Democrats to expedite the legislative process.
However, Congress may prioritize other pressing issues before turning its full attention to crypto regulation.
Implementing changes in crypto legislation is expected to take a lengthy timeline, with some experts estimating it could take over a year for new regulations to materialize.
The rulemaking process could extend for months if the CFTC is granted oversight authority.
The crypto industry will need to navigate an uncertain regulatory landscape, and meaningful change may be further off than anticipated.
The future of regulation in this sector will be shaped by the interplay between political priorities and the evolving crypto market.